Massachusetts minimum wage would increase under new bill on Beacon Hill

BOSTON — Though minimum wages paid to hourly workers in Massachusetts continue to rank among the best in the country, four states and the District of Columbia have leapfrogged the state since the minimum wage last increased five years ago and proponents of increasing the wage worry its value will continue to erode without action.

Considered both a high wage and high cost of living state, the state’s $8 per hour minimum wage is guaranteed under state law to remain higher than the national wage, but some advocates say that is still not enough in the Northeast where home heating, housing prices and necessities such as groceries can be more costly.

“These states are just way behind in where they ought to be in terms of keeping up with inflation that has eroded the real value of the minimum wage,” said Sen. Marc Pacheco, a Taunton Democrat and the lead sponsor of a bill to increase the minimum wage over three years to $11 an hour.

President Barack Obama’s call this month to increase the federal minimum wage to $9 per hour brought new attention to the minimum wage. With the current federal minimum wage only 75 cents per hour lower than the Bay State’s wage floor, Obama’s plan to reset the minimum wage also sparked questions in Massachusetts about whether the state would be better off waiting for Congress to address the issue or tackling it themselves.

Gov. Deval Patrick last week suggested that raising the state’s minimum wage was not on the top of his list of priorities, but he did not rule out supporting a state increase if it landed on his desk.

Asked about Obama’s proposal and prospects of pushing a similar increase in Massachusetts, Patrick said, “I support the president. We already have one of the highest minimum wages in state law, but I’m willing to look at that.”

Five years have elapsed since the minimum wage in Massachusetts increased in January 2008 to $8 an hour, still one of the highest wage floors in the country. The Legislature has not voted on a minimum wage increase since 2006, when it phased in the escalation over two years and overrode a veto by then-Gov. Mitt Romney to do so.

At the time, the $8 minimum wage equaled California’s and lagged behind only the state of Washington.

Since then four states, including Connecticut and Vermont, and the District of Columbia have surpassed Massachusetts. Nevada also requires employers to pay workers $8.25 an hour if they do not receive health benefits, but if health insurance is provided the minimum wage rate falls to $7.25.

California continues to pay workers a minimum of $8 an hour, and Washington has the highest minimum wage in the country at $9.19. Businesses in Connecticut must pay at least $8.25 an hour, and Vermont workers earn at least $8.60 an hour.

In his State of the Union address, Obama called for increasing the minimum wage to $9 an hour, up from the current rate of $7.25, and indexing the rate to inflation, something 10 other states already do. “Let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty,” Obama said.

Massachusetts state law dictates that the state’s minimum wage will automatically increase to 10 cents higher than the federal wage if it becomes higher than the state minimum.

Jon Hurst, president of the Retailers Association of Massachusetts, said he did not think his organization would fight a federal increase in the minimum wage, but warned of negative consequences should Massachusetts policymakers decide to tackle the issue on their own.

“Far better that Congress deals with it and comes up with a reasonable increase that applies to 50 states than Massachusetts goes alone and put local employers out of step with employers over the border,” Hurst said.

Hurst said retailers, who account for 20 percent of the private sector jobs in Massachusetts, are most concerned about being on a level playing field with businesses in other states. That’s not to say, however, that a federal minimum wage hike wouldn’t impact hiring, Hurst said.

“There’s no question in my mind that higher minimum wages always have an impact on hiring, particularly for younger people,” Hurst said.

Pacheco said state leaders should not be content to wait for an unlikelihood that Congress will act. “It needs to be fixed nationally, but we are long overdue to increase the minimum wage here in Massachusetts,” Pacheco said.

Last session, Pacheco filed a bill that would have phased a minimum wage increase to $10-an-hour over three years. The bill cleared the Joint Committee on Labor and Workforce Development, but never came up for a vote in the Senate.

“All of the terrible things that are supposed to happen to the economy have never come to fruition. In fact, we’ve seen there’s actually increased purchasing power that gets spent immediately in the economy,” Pacheco said.

Pacheco refiled the bill again this session, adjusting the rate increase to $11-an-hour over three years, and again proposing to tie future adjustments to inflation. He said the average worker today makes $16,000 a year earning a minimum wage.

“No one is arguing $16,000 a year is enough to be able to make ends meet in terms of housing costs, food and basic needs. In 1968, they were earning $21,000 a year in terms of purchasing power. Today, the wage doesn’t go as far as a worker in 1968,” Pacheco said.

Despite having relatively few dues-paying members earning a minimum wage, the executive board of the AFL-CIO of Massachusetts – the state’s largest union – has endorsed the minimum wage bill filed on Beacon Hill, and plans an education program to inform people about the issue.

“I think it makes a lot of sense and it’s reasonable,” said AFL-CIO President Steven Tolman. “I do think that the president highlighting it makes it more prevalent and puts a keen eye on it. I also think that reality is setting in because we’re seeing all these statistics saying the middles class over the last 30 years has gotten knocked around.”

Like Pacheco, Tolman said he doesn’t “buy” the argument that increasing the minimum wage now will hurt a still fragile economy and slow hiring.

“It’s not too much to ask to have a decent hourly wage for the people making the lowest income. We have to be more responsible. Look at the cost of health care or groceries,” he said.

Pacheco said he hopes later this year to organize a tour of the state with supporters of his bill to “energize constituents to contact their legislators.”

“I think it’s going to take some convincing, but I think we can find common ground,” Tolman added.